Big Picture

The easing is in line with the central bank’s forecast for average 5 percent inflation October-December, which several economists -- including those at Citigroup Inc. and Nomura Holdings Inc. -- say will create room for another interest-rate reduction this year. Patel on Oct. 4 lowered the benchmark rate to 6.25 percent and signaled a looser tolerance for price pressures as policy makers look to spur investment and factory output in Asia’s No. 3 economy.

Economist Takeaways

"A sub-4.5 percent is not sustainable but, at the same time, inflation is no longer an issue," said Sujan Hajra, a Mumbai-based economist at Anand Rathi Financial Services Ltd. "With factory output contracting and inflation softening, it becomes necessary, and also provides elbow room for the central bank, to cut interest rates."

Details

The easing in the consumer food price index was led by a 7.2 percent fall in the cost of vegetables; pulses rose 14.3 percent and sugar surged 26 percent